Monthly Archives: May 2012

Blaming the unabated imports from China, for the slowdown in the Indian manufacturing sector, AM Naik, Chairman of L&T told ET Now that ‘zero duty’ policies adopted for Chinese goods form a significant part of the reason for problems in manufacturing.

Talking in context to the dismal Gross Domestic Product ( GDP) growth rate numbers for the fourth quarter Naik said that while the Indian government was propagating the withdrawal of subsidies, China’s attempt to subsidise its products with their currency was harming the factory growth in India.

Commenting on Prime Minister Manmohan Singh’s assertion of creating 20-25 million jobs every year, at a BRICS countries meet, Naik said the country’s policies have resulted in creation of 10-20 million jobs in China instead.

He was of the opinion that while the power equipment sector can create millions of jobs in India, imports from China were quelling any such opportunities. “If you continue to follow this policy while wanting to withdraw the subsidies from India but indirectly tolerate all subsides from China this will happen,” he said.

India’s economic growth rate slipped to 5.3 per cent in the fourth quarter of 2011-12, lowest in nearly 9 years due to poor performance of the manufacturing and farm sectors.

During the quarter ending March 31, growth in the manufacturing sector contracted to 0.3 per cent, from 7.3 per cent in the corresponding period of 2010-11.

Farm output also exhibited a similar trend and expanded by just 1.7 per cent during the quarter, compared to 7.5 per cent in the Q4, 2010-11.

However, mining and quarrying production growth stood at 4.3 cent during the quarter under review, as against a growth of meagre 0.6 per cent in Q4 of in 2010-11.

Growth in the construction sector slowed to 4.8 per cent during the January-March quarter of 2011-12, from 8.9 per cent in the year-ago period.

BHEL received the order for supply and installation of the main plant package, including boilers, turbines and generators, for NTPC’s power project in Madhya Pradesh

New Delhi: State-owned Bharat Heavy Electricals Ltd (BHEL) on Thursday said it has received a contract, worth Rs1,143 crore, from India’s largest power generation utility NTPC for setting up a 500-Mw power generating unit at its Vindhyachal Super Thermal Power Station in Madhya Pradesh, reports PTI.

“NTPC has placed a major order on the company for supply and installation of the main plant package (boilers, turbines and generators) for a power project in Madhya Pradesh involving one generating unit of 500 Mw,” BHEL said in a statement.

“Valued at Rs1,143 crore, the contract envisages setting up a 1×500 Mw thermal power generating unit at NTPC’s Vindhyachal Super Thermal Power Station (STPS), in Madhya Pradesh,” the statement said.

On commissioning of the unit, 12 million units of electricity will be added to the grid, every day, BHEL said.

“With the commissioning of this unit, the cumulative generating capacity of the power station will be enhanced to 4,760 Mw,” it said.

BHEL’s scope of work in the contract envisages design, engineering, manufacture, supply and erection & commissioning of Steam Generator and Steam Turbine Generator along with associated Auxiliaries and Controls & Instrumentation.

The equipment for the project will be manufactured at BHEL’s Trichy, Ranipet, Haridwar, Hyderabad, Bangalore and Bhopal Plants, while the company’s Power Sector, Western Region, will be responsible for erection and commissioning of the equipment.

The company has established the capability to deliver power plant equipment of 20,000 Mw a year.

The National Power Exchange (NPEX), the country’s third power exchange which is yet to launch its operations, has received separate merger proposals from the other two power exchanges, Indian Energy Exchange (IEX) and Power Exchange India (PXI).

M G Raoot, managing director (MD) and chief executive officer (CEO) of NPEX, said it had informally discussed the merger issue with IEX and PXI, but was yet to take a decision on the issue.

“NPEX is poised to hit the market at an opportune time. The Central Electricity Regulatory Commission (CERC) has recently given its approval for our business rules and by-laws. We are going ahead with our business plan. It’s true that both IEX and PXI have informally discussed with us a proposal for merger. We have not taken any formal view in this regard,” Raoot told Business Standard.
The proposal aims at synergising opportunities in power trading on exchanges. NPEX is promoted by NTPC, NHPC, Power Finance Corporation and Tata Consultancy Services. The other equity partners are BSE, IFCI, Meenakshi Power and DPSC.

“We are confident we will be able to grab the required market share for becoming economically sustainable through our well-conceived business plan,” Raoot added.

IEX MD and CEO Jayant Deo confirmed the merger issue was discussed informally between the two exchanges. “There is a synergy. When IEX came to know that NPEX is thinking of merger, we felt that they should merge with the leader (IEX). The issue is being discussed informally,” he said.

Rupa Devi Singh, MD and CEO of PXI, said the exchange was actively engaging with stakeholders and was confident of its strategy to increase its market share and product offerings. “PXI has been in the forefront of several policy advocacy issues to develop the power market in an orderly manner, such as congestion management and trading of longer tenure products. This will lead to increased market participation and growth of overall market,” she said.

IEX and PXI are currently engaged in energy transactions in the day-ahead and term-ahead markets and issuing renewable energy certificates. The daily turnover at IEX is about 45 million units, while PXI clocks three million units. During 2011-12, IEX’s total transaction was 13.8 billion units, while for PXI it was 1.028 billion units.
Source: BS

Haryana suffered another major setback on power front after it was discovered that the turbine blades of 600 MW Khedar thermal units has been damaged.

The performance of Reliance built Chinese make thermal units has come under scanner after the failure of its turbines at Yamuna Nagar and Khedar thermal plants. Both units at 600 MW Yamuna Nagar thermal are under long shut downs after turbine blades failures. The rotor of turbine of unit 1 is under repair at the works of Siemens at Baroda and unit can be expected only in November after 14 months. The turbine blades of second unit were found damaged when unit tripped on March 31 and unit cannot be expected before June end.

According to sources now the turbine blades of 600 MW thermal unit 1 at Khedar has been found damaged and HPGCL engineers have observed that even the foundation of Unit 1 is in a twisted condition. This is a serious development as the defect of a twisted foundation of Turbine is rare/unheard of. This unit was commissioned in August 2010 and was to undergo performance guarantee test.

Padamjit Singh Chairman All India Power Engineers Federation said that the incident of defect in turbine foundation has added a new dimension to the quality and reliability aspects of Reliance/Shanghai working, and it deserves to be treated as a problem of national dimensions.

Singh said that it appears that a “sealing strip” inside the turbine became loose or broke loose and impacted the turbine blades. About 100 blades of the turbine have been reported as dented/damaged. The turbine alignment is out by a huge margin of 2 mm, level of turbine bearing pedestals is out and catenary is disturbed.

Both units of super critical plant at 1320 MW Jhajjar are not producing any power. One unit is under shut down for general maintenance from May 11 while other unit is down due to coal shortage. The unit 4 at Panipat thermal is down due to boiler leakage.

Haryana is facing a power shortage of over 257 lakh units daily while supply in state is restricted to 1035 lakh units. People are facing a minimum of 8 hours shortage in cities and power position in village is even worse. The villagers hardly get power for few hours.

The power cuts in state are set to increase from present minimum 8 hour after power supply for paddy is ensured after June 10.The power demand/ shortage is will rise by another 300 lakh units. The state has been over drawing more than 110 lakh units daily on frequency based rates.

There is no incentive for HPGCL engineers to improve the performance of units. Even the existing bonus for last three years has not been announced so for.

With the mercury rising this month, short-term power prices have seen an increase of 20-25 per cent, with the highest price at which power was traded touching Rs 5 per unit.The average for power trading was Rs 3.5-4 per unit. “Due to mismatch in demand and supply, the prices are expected to increase further but it will not reach too high a level,” Rajesh Mendiratta, the India Energy Exchange’s senior vice-president for business development, told media.
There is a shortage of about 9,000 Mw in overall demand from the grid, at a little over 100,000 Mw. The country’s biggest power exchange, IEX received purchase bids for 77,000 Mw and of 72,000 Mw for sale on 29-05-2012. Traded volumes on the exchange have risen to 45,000-50,000 Mw/hour this month on a daily basis from 35,000-40,000 Mw/hour in April, he said.

Last year, in the same period, the average rates were 2.9 per unit. (There was a particular problem in October, when the coal shortage crisis sent short-term power prices and volumes haywire at the exchanges, with average rates surging to Rs 7-7.5 per unit, from Rs 2.5-3.5 and traded volume fell to 35,000 Mw/hr on a daily basis from 100,000 Mw/hr).

Jindal Steel and Power, Lanco Infratech and JSW Energy are among the largest traders in merchant power. According to an expert, merchant power rates will remain on the higher side till the issues in demand and supply as well as coal shortage are addressed. Also, every year in the summer, the prices move upwards.

The power industry has been facing inadequate coal supply for some time, as the production of government-owned Coal India, the near-monopoly producer, is unable to match their rising need. Demand for coal in India has grown at an annual rate exceeding 8.4 per cent over the past five years. That of annual supply has been nor more than 5.4 per cent during the period. For 2011-12, while India’s coal demand is estimated at 696 million tonnes, 554 mt is likely to be available, leaving a gap of 142 mt to be met through import.

Data from the Central Electricity Authority also shows about 30 plants are at a critical level, with coal stock of less than seven days. This might aggravate the power supply problem. There are 95 thermal power plants with a total capacity of 91,487 Mw. Inadequate coal allocation and less import are the major factors for the decreasing level of stocks at the power plants. Last year, issues such as heavy rain disrupting coal supply, a workers’ strike at Coal India and the Telangana agitation in the south had snapped fuel supply at many power stations.

After a directive from the Prime Minister’s Office and later a Presidential directive, Coal India signed some fuels supply agreements (FSAs) for commitment of at least 80 per cent supply. However, some power companies have refused to sign the FSA because of various clauses they’ve objected to.

The solar power company SunEdison is launching a program to get electricity for the first time to more than two dozen villages in India.

The company on Wednesday announced the rural electrification program called Eradication of Darkness. SunEdison, a subsidiary of suburban St. Louis-based MEMC Electronic Materials Inc., will design, install and manage distributed-generation solar power plants to 29 villages that have never had electricity.

SunEdison says more than 400,000 people in India live without electricity, limiting education and economic opportunities and making them more vulnerable to sickness and famine.

The projects are expected to be funded by a combination of government grants and private money from investors and corporations. The company declined to estimate the cost or project a timetable.

Coal India can supply only around 65% of the power sector’s coal requirement, and the balance 15% of its promised supplies to the generation plants needs to be imported, Narsing Rao, chairman of the state-owned company, said on Monday.

A Presidential directive requires Coal India to meet at least 80% of the fuel requirement of power plants, and the penalty for failing to supply any amount less was fixed at 0.01% of the shortfall.

“Roughly, we expect to supply 60-65% of the Letter of Assurance (LoA) quantities from our own sources, according to our plans. The difference between that and the 80% level, or about 15%, has to be imported by us if they want us to import,” Rao said while announcing the financial results for 2011-12.

During the current fiscal, Coal India plans to supply 347 million tonne (mt) to the power sector, up from 312 mt last year.

Of this, Coal India is tied up to supply 306 mt under old LoAs, which require it to supply 90% of the commitment if it doesn’t want to pay a penalty. The rest would comprise fresh fuel supply agreements (FSAs) to be signed this fiscal, including 12 mt signed so far, said Rao.

On the 35 FSAs yet to be signed with power producers, Rao said many don’t have power purchase agreements signed with the discoms, which is a necessary condition for firming the FSA. “The prospective FSA customers should have signed the power purchase agreements by now.”

Rao refused to comment on the ongoing war of words triggered by a vitriolic attack by the NTPC chief.

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The Neyveli Lignite Corporation (NLC) will add 1,000 MW of power to the regional grid during the current financial year, said its Chairman and Managing Director A.R. Ansari on 28-05-2012. Addressing newsmen, he said that the Corporation was on the verge of commissioning unit one of Thermal Power Station-II of 250 MW plant at Neyveli, followed by the second unit in December.
The first unit of 500 MW plant of Tuticorin, a joint venture of NLC and Tamil Nadu Generation and Distribution Corporation, would be commissioned during 2012-13 and the second unit by 2013-14.

Mr. Ansari said that the plan of the NLC was to add 15,000 MW of power by 2020 at an investment of around Rs.90,000 crore, of which 30 per cent would come as equity from NLC.

About 80 per cent of the projects were coal based and NLC was scouting for coal mines in Australia.

The future plans included a coal-based power plant in Uttar Pradesh [as a joint venture with Uttar Pradesh Rajya Vidhyut Utpadan Nigam]; a coastal coal based power plant in Sirkazhi and another plant in Orissa, each having the capacity of 4,000 MW.

Among other projects were 250 MW mine-cum-thermal power station at Bithnok, Rajasthan; 250 MW Hadla and Palana lignite mine cum Barsingsar extension power project in Rajasthan; Devangudi mine project in Neyveli region and solar and wind power projects of 75 MW. Besides, NLC would restructure mine-1 and mine 1A.

Regarding the Sirkazhi project, he said, “Obtaining in-principle approval and awarding the contract will be done by 2013-14. Thereafter, it would take at least 42 months to commission the first unit and 46 months for the second unit. That’s why we have set the target date as 2020.”

For 2011-2012, NLC posted a 8.7 per cent growth in its net profit at Rs.1,411.33 crore against Rs.1,298.33 crore reported for the corresponding period last year.

The total power generation from all the thermal power stations put together was 18,788.59 million units (MU).

While stating that the Corporation had posted all round growth in fiscal and financial parameters for 2011-2012, he said that lignite production went up by 6.25 per cent and power generation by 5.08 per cent in 2011-12.

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